Part time entrepreneur: hire your first employee
Even if you have started your entrepreneurship journey as a side job, if things go well you should get to the growing stage at some point. Growing means more business, more opportunities and most likely to start employing people.
Having your first employee feels great. But for the part time entrepreneur, the implications could be bigger than for a regular business. Let’s make a list.
Chances are that because you run your business only in the evenings you don’t have a proper office and you’re doing most of the stuff from your own home. Great. So now you have to think where you are going to put your first employee – you might not want him to invade your private life by coming to your house to work each day. If you are not a telecommuting fan and have your first employee working from his own home, you should already be thinking to rent an office.
Renting an office can be a real burden for the part time entrepreneur, mostly because running the business as a second job might not get enough cash flow and profits to cover the new office expenses. But because you are an entrepreneur and like to evaluate challenges and find solutions, you might come up with an idea. For example you could share your office with somebody else: search your network for an entrepreneur that has some office space to share.
Now that the office space is taken care of, you will hit the next challenge. You’ll need to double your office utilities: you have a fax at home, now you need one for the new office. You have a laptop, now you need two. Buying paper to print contracts? Make it double now.
Great, you have the space, you have the tools. Now you need the “humans”. First thing that comes to your mind is that you can’t afford to pay them. Also you can be sure that they will be far less efficient in getting things done than you are: first they are not owners and they care a lot less about the business, and second you know the business best and you can’t expect anyone else to be better at it.
Actually the most important evaluation is to calculate if by paying a person you will be able to generate enough extra income to cover the costs and make a little more profit from it. You have the following results:
1. Cost of employee bigger than extra income : not a good way to go
2. Cost of employee equal extra income : not making a profit but growing the business
3. Cost of employee smaller than extra income : great
But what would be the reasons you would like to hire an employee? One of the following:
– you are spending way to much time with time consuming/repetitive tasks that kill your innovation/growth potential
– the new employee could bring new business (mostly if he’s a sales)
– exit strategy if your work could be done by somebody else while you are enjoying Hawaii.
But you have even more challenges than paying for the stuff and people – and that a psychological one. You have created the business, you have run it so far, you are the master of all things:
– hire an experienced employee and he will have it’s own opinions and tell you things you do wrong. Hey but you are the business master, how can he know better? I hate him already.
– hire a freshman. He doesn’t know anything about the business, but because you master it, everything that he does seems very bad. I hate him already.
Either way, the human interaction between you and the new employee will play an important part on how things will go. You are used to do everything on your own, isolated in the basement, now you get to communicate your needs, get feedback and receive results.
Now…you have some more responsibilities. No matter what, you have to pay him the insurance and the salary. You have to help him, train him and do everything else a normal company does with it’s employees. Including Team Building 🙂
Did I mention that you are running your business only in the evenings? Yep, most likely your employee will have normal working hours. You can’t actually get in contact with him very often, because you are not available during the day…He is on his own. Or maybe he didn’t even come to the office today? Or maybe he is playing Tetris all day long?
Get back to the sharing office idea. You will actually need more from your office pal. You need to ask him to somehow keep an eye on your new employee… Hard, you might have some confidential things going on so how could he check on your new employee?